In the New York Times, columnist Ron Lieber devotes a piece to SoFi, a company that is suing the federal government to end the pause on student loan payments.
Lieber reports, “SoFi did not want to comment, citing the need to stay quiet before its May 1 quarterly earnings report. But last month, it was quick to explain that it was in favor of President Biden’s efforts to cancel up to $20,000 in student loan debt. It also endorsed the initial 2020 pause. The company would also be fine with an immediate payment restart just for those whose incomes are too high to qualify for Mr. Biden’s cancellation plan.”
He goes on, “Here’s what it did not say, but what outside observers surmise: The company doesn’t believe for a single second that the Biden administration will lift the payment pause this summer, as it has said it intends to do. Why would it, just as a presidential election is heating up?”
In January, Diego Briones, Eileen Powell, and Sarah Turner wrote about the payment pause for Education Next. Under the headline “Student Loan Payment Pause Benefits High-Income Households the Most,” they wrote: “Continuing to extend the student loan payment pause is expensive and regressive. It costs at least $5 billion per month and delivers the bulk of the benefits to upper-income families.”
Their article went on, “In addition, these many extensions threaten the government’s future credibility to administer student loan programs or, indeed, any government lending initiative. With at least three announcements of a ‘final’ pause, it seems unlikely that borrowers will take such announcements seriously and change their spending behavior to prepare for payments to restart.”
Last updated April 25, 2023